PRODUCTION TECHNOLOGY, PATENT AND CARBON EMISSION

Soumyananda Dinda

Chandragupt Institute of Management Patna

BACKGROUND

Climate Change challenges to the existing production technology

Clean technology

Innovation and Patent Rights

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PATENT Patent is an important legal document, issued by an authorized government agent, granting the right to exclude anyone else from the production or use of a specific new device, or process’ for certain defined yearsThe right embedded in the patent can be assigned by the inventor to somebody else, usually to his employer, a corporation, and/or sold to or licensed for use by somebodyPurpose of patent system is to encourage technological progress

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PRODUCTION TECHNOLOGYPatent registration is considered as a proxy for innovation and provides country’s technological capabilitiesThe patent registration of a country shows the trends in the improvement of technological strengthproduction design patent (DGPNT) as a proxy of production technology Production design patent is issued for new, original and ornamental design for an article of manufacture

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US PATENT AT USPTOThe US economy dominates in the world The US might have been attempted to innovate green technologyPatent registration at the USPTO is high and dominates its position in the world over last several decades. The US should have the efficient technology - both in terms of productivity and energy saving innovationsORNL shows the US is on the top polluters listIt contradicts general believe that the modern sophisticated upgrading technology helps to mitigate climate change. How far is it true? 5

OBJECTIVEDoes the upgraded technology reduce emission?Is it true?What is the causal relationship among upgraded technology, income, emission?What will be the policy?

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THEORETICAL BACKGROUND

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Ayp μ

= 10 <<μ

)(kfy = 0>kf 0<kkf

AA

yy

pp &&&

−=

Ayp lnlnlnln −+= μ

CONT…

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teθμμ 0=

tθμμ += 0lnln

Aytp lnlnlnln 0 −++= θμ

AA

yy

pp &&&

−+= θ

DATA CO2 Emission taken from Carbon Dioxide Information Analysis Centre (CDIAC)DGPNT from USPTORGDP from PWT6.3Period: 1963 - 2007

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FIGURE 1: TRENDS OF DESIGN PATENTS

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FIGURE 1: TRENDS OF TOTALCO2 EMISSION

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FIGURE 1: TRENDS OF PER CAPITA CO2 EMISSION

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TABLE 1: DECADE-WISE AVERAGE GROWTH RATE OF INCOME (RGDPCH), CO2 EMISSION (PCCO2) AND PRODUCTION DESIGN PATENT (DGPNT) IN THE USA

Decade PcCO2 RGDPCH DGPNT

1963-69 3.18 3.69 1.96

1970-79 0.28 2.40 -0.30

1980-89 -0.38 2.29 4.34

1990-99 0.23 2.08 6.08

2000-07 -0.63 1.11 4.04

1963-07 0.39 2.24 4.76

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FIGURE 2: DECADE-WISE AVERAGE GROWTH RATES OF INCOME, EMISSION AND PRODUCTION DESIGN PATENT IN THE USA

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TABLE 2: RESULTS OF UNIT ROOT AND CO-INTEGRATION TEST

A: Unit root test

ADF KPSS

Variables Level 1st Difference Trend Stationary

lnCO2 -3.15 -4.91*** 0.1515**

ln GDPNT -2.19 -5.304*** 0.2301***

ln RGDPCH -0.86 -5.13** 0.1526**

B: Co-integration Test

Eigen value LR Critical value 5%

Critical value 1%

Ho: r = 0 H1: 0.435 44.408** 42.44 48.45

Ho: r = 1 H1: 0.299 19.856 25.32 30.45

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TABLE 3: RESULTS OF VECTOR ERROR CORRECTION MODEL

Estimated Co integration relation

ln PcCO2 ln DGPNT ln RGDPCH

Cointigrating vector 1 -0.169(-2.597)

-2.819(-4.66)

Loading coefficients

Variables D(ln PcCO2) D(ln DGPNT) D(ln RGDPCH)

Error Correction -0.233***(-2.93)

0.366(0.768)

0.083(1.277)

Deterministic term

Constant -5.999***(-2.934)

9.394(0.767)

2.15(1.293)

Trend (t) -0.016***(-2.97)

0.028(0.832)

0.006(1.244)

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TABLE 3: RESULTS OF VECM (CONT........)

VAR

Variables D(ln PcCO2) D(ln DGPNT) D(ln RGDPCH)

D(LPcCO2(-1)) -0.027(-0.164)

-1.215(-1.24)

0.03(0.226)

D(LDGPNT(-1)) -0.068**(-2.31)

-0.157(-0.89)

-0.03(-1.24)

D(LRGDPCH(-1)) 0.087(0.37)

1.487(1.053)

0.285(1.49)

D(LPcCO2(-2)) 0.035(0.219)

0.171(0.18)

-0.034(-0.265)

D(LDGPNT(-2)) -0.010(-0.283)

-0.179(-0.863)

-0.011(-0.385)

D(LRGDPCH(-2)) -0.437**(-2.299)

1.073(0.94)

-0.081(-0.521)

D(LPcCO2(-3)) 0.243(1.6)

1.147(1.26)

0.004(0.033)

D(LDGPNT(-3)) 0.077**(2.278)

0.056(0.28)

0.08***(2.91)

D(LRGDPCH(-3)) -0.39(-1.94)

0.17(0.14)

-0.011(-0.065)

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FIGURE 3: VECM FORECAST ERROR IMPULSE RESPONSES

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CONCLUSIONProduction design innovations raise carbon emission in long runprogress in production technology reduce CO2emission growth in short runA specific kind of causality running from production design innovation to CO2 emission in the USA during 1963 – 2007The impulse responses of production design patents suggest shortening the patent rights

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Thank you

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